The future of the telecommunications industry – opportunities and challenges

The endless emergence of new technologies and concepts in the telecommunications industry has cast a veil of mystery over the industry's understanding of the industry. It seems that it is no longer feasible to predict the development of the telecommunications industry in today's rapidly changing world. However, recent developments have forced us to think about the question of whether the telecommunications industry we once knew still exists?

This article will explore the reasons driving change, the business problems that currently exist, the likelihood that these business problems can be solved, and the types of transformation that are occurring in the telecommunications industry.

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Consumer Behavior

If we start from the perspective of consumers, we can clearly see that the behavior patterns of various consumers, whether residential, commercial/enterprise/corporate, mobile or other, have changed dramatically. Consumers play the role of both consumers and producers. With the continuous evolution of digitalization, consumers' participation in telecommunications services has also gradually become digitalized. We can see that many fields such as banking, finance, retail, education, and health have undergone digital transformation, but compared with other fields, the telecommunications industry seems to lag behind in digitalization.

Business Problem

Uncontrollable factors such as user expectations, market behavior, and socio-economic changes, among others, are placing tremendous pressure on traditional telcos or communications service providers (CSPs) to transform into digital service providers (DSPs). DSPs are expected to conduct all engagements with data users (external) and deliver predictive services to users using digital workflows (internal).

The real business problem facing CSPs is increasing costs and decreasing revenues.

To support the growing traffic driven mainly by video (real-time and non-real-time entertainment and communications), about 70% of the global CSP funds are poured into networks, data centers (DCs) and related systems, resulting in rising CAPEX and OPEX. However, the number of users and revenue/average revenue per user (ARPU) have not increased. In most markets, especially the mobile market, the penetration rate has exceeded 100% and is approaching saturation.

Transformation

Solving the problem of network traffic and operator revenue requires lowering the cost curve and increasing the revenue curve (it is difficult for operators to lower the traffic curve or increase the number of users). This requires CSPs to make fundamental changes in strategy formulation, architects, engineers, design, planning, implementation and maintenance of networks, data centers and systems.

The *** transformation is about transforming the traditional network or old generation network (OGN) based on traditional technology into the next generation network (NGN) based on Internet Protocol (IP) packet technology. These networks need to be further transformed into software-based networks (SGN), only in this way can CSP transform itself into DSP.

The control and management of everything, including telecommunication systems, is done through software because it is more flexible, efficient and can complete tasks more effectively than performing operations directly on hardware. This can reduce the total cost of ownership (TCO) on the one hand, and more importantly, introduce new services and products to the market, thereby helping to increase ARPU faster.

The traditional boundaries between information technology (IT) and communication technology (CT) are becoming increasingly blurred, creating new human resource demands, such as engineers who can handle both computing (including coding and programming) and communications.

CSPs will also make extensive use of technologies such as machine learning, artificial intelligence, and big data in future networks and systems.

Virtualization and cloud computing

Virtualization and cloud are two essential concepts in future telecommunication networks. Virtualization means emulating hardware in software, thereby efficiently using a common pool of hardware resources. This IT field brings huge advantages, and the success of all hyperscale companies (such as Amazon, Alibaba, Facebook, and Google, etc.) is based on virtualization.

Cloud computing completes computing work on remote computers, which eliminates the need to maintain dedicated computing resources locally based on specific needs. With cloud computing, the required resources can be purchased/consumed based on demand.

Virtualization is used in cloud computing platforms. Although these concepts come from the IT field, CSPs also use it in their networks and systems to transform into DSPs due to the advantages of the technology.

From land to people to things

150 years ago, so-called communication was just connecting different places, and then evolved to connecting people, and now we have entered the era of the Internet of Things. These "things" can be anything from wearable devices, household items, vehicles, drones, medical equipment, etc., which has brought about the Internet of Things (IoT) or the Internet of Everything (IoE) and machine-to-machine (M2M) communication. It is expected that by 2020, about 100 billion to 200 billion devices will be connected through the Internet of Things, and most of the devices will be used in smart concepts such as smart education, smart transportation, and smart cities, which will become an important part of the Internet of Things and the Internet of Everything.

Managing, controlling and securing these devices will be a real challenge, and the industry is now working on possible solutions.

Wireless becomes the ubiquitous medium

Access to places, people and devices in the future will be primarily based on wireless technologies, with technologies such as Wi-Fi and the upcoming fifth generation (5G) playing a key role in this. However, wired technologies like fiber will also play an important role in providing the required backhaul for all access networks.

in conclusion

The future of the telecommunications industry brings opportunities and challenges to all industry stakeholders. There are many factors that cause major changes, and we can only expect more changes in the future. In addition to the new concepts and technologies mentioned today, there will be more new concepts and technologies, and CSP/DSP will soon adopt new technologies and change.